Progressive Spine & Orthopaedics, LLC v. Empire Blue Cross Blue Shield
| Decision Date | 27 February 2017 |
| Docket Number | Civil Action No. 16-01649 |
| Court | U.S. District Court — District of New Jersey |
| Parties | PROGRESSIVE SPINE & ORTHOPAEDICS, LLC, Plaintiff, v. EMPIRE BLUE CROSS BLUE SHIELD, ABC INC.S 1-10, AND JOHN DOES 1-10, Defendants. |
NOT FOR PUBLICATION
This matter comes before the Court on Defendant Empire Blue Cross Blue Shield's ("Empire" or "Defendant") motion to dismiss and Plaintiff Progressive Spine & Orthopaedics, LLC's ("Progressive Spine" or "Plaintiff") cross-motion to remand to state court. The Court reviewed all submissions made in support of, and in opposition to, the motions. For the reasons that follow, Defendant's motion is granted in part and denied in part. As to Plaintiff's motion, it will have the option of filing an amended complaint or, alternately, having the matter remanded to state court if it decides to forego its claims based on the Employee Retirement Income Security Act ("ERISA").
Plaintiff is a healthcare provider located in Bergen County, New Jersey. Complaint ("Compl.") ¶ 1 (D.E. 1-1). Defendant is an insurance company that is "engaged in the business of providing or administering healthcare benefits, plans or policies." Id. ¶ 3. The crux of this matter is Defendant's refusal to pay Plaintiff for medical services that Plaintiff provided to four patients who are members of Defendant's health benefit plans. Id. ¶ 7. The parties do not dispute that the health benefit plans are ERISA-based plans.
Plaintiff performed "extensive spinal surgery operations and related procedures" on the following patients: A.G., D.F., C.P. and B.G (collectively the "Patients"). Id. ¶ 8. Plaintiff does not have an agreement with Defendant setting rates for the provision of medical services. Id. ¶ 12. Instead, all of the Patients, except D.F., signed contracts "assign[ing] direct payment [by Defendant] of any . . . medical insurance benefits" to Plaintiff. Id. ¶ 9. The operations performed on patients A.G., C.P., and B.G. were preauthorized by Defendant. Id. ¶ 10. Patient D.F. was admitted to a Bergen County hospital on emergency basis and preauthorization for his procedure was not obtained by Plaintiff. Id. ¶¶ 10-11.
Plaintiff alleges that it submitted "reasonable medical bills" to Defendant for its services, but Defendant declined to pay Plaintiff for those services. Id. ¶¶ 13-14. Plaintiff submitted numerous appeals, and Defendant eventually paid Plaintiff only "nominal amounts for the outstanding bills." Id. ¶ 15. Plaintiff seeks to recover the unpaid amounts. Id. ¶ 16.
On February 12, 2016, Plaintiff filed an eight-count complaint against Defendant alleging the following causes of action: (1) "Breach of Contract -- Claims Assigned from A.G., C.P., and B.G.," (2) "Breach of Contract -- Plaintiff's Original Claim for All Patients," (3) "Quantum Mer[u]it -- Plaintiff's Original Claim for All Patients," (4) "Estoppel -- Plaintiff's Original Claim for Patients A.G., C.P., B.G.," (5) "Unjust Enrichment -- Plaintiff's Original Claim for All Patients," (6) "Denial of Benefits Under ERISA -- Claims Assigned From Patients A.G., C.P., B.G.," (7) "Breach of Fiduciary Duties Under ERISA -- Claims Assigned from Patients A.G., C.P., B.G.," and (8) "Failure to Provide Documents Under ERISA -- Claims Assigned from Patients A.G., C.P., B.G." Id. ¶¶ 17-75.
On March 24, 2016, Defendant removed this matter to the District of New Jersey pursuant to federal question jurisdiction under ERISA, 29 U.S.C. § 1001 et seq. and 29 U.S.C. § 1132(a)(1)(B). D.E. 1.2 On April 28, 2016, Defendant filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), 12(b)(6) and 8(a).3 D.E. 5. Thereafter, Plaintiff filed an opposition and cross-motion to remand, to which Defendant replied. D.E. 11, 13.
Defendant argues that Plaintiff does not have standing to assert claims on behalf of D.F. because Plaintiff has not alleged that D.F. assigned any benefits to Plaintiff and Plaintiff is not an ERISA beneficiary of the health plans at issue. Def. Br. at 8. Defendant posits that absent analleged assignment, Counts Two, Three, and Five must be dismissed as they pertain to D.F. Id. at 8-9. Defendant contends that Plaintiff does not have standing to bring claims on behalf of B.G., A.G., and C.P. because Plaintiff has not adequately pleaded that there was a valid assignment from those patients. Id. at 9-10. Additionally, as to B.G. only, Defendant maintains that even if there was a purportedly valid assignment to Plaintiff, the assignment is nullified by virtue of the anti-assignment provision in B.G.'s health plan. Id. at 10-11.
Defendant further asserts that Plaintiff's breach of fiduciary duty claim (Count Seven) should be dismissed because it is duplicative of the relief sought in its denial of benefits claim (Count Six). Id. at 12. Also, Defendant argues that Plaintiff's state law claims for breach of contract, quantum meruit, estoppel, and unjust enrichment are completely and expressly preempted by ERISA and should be dismissed. Id. at 14. Finally, Defendant contends that Plaintiff fails to state a claim for Defendant's alleged failure to provide documents under Section 502(c) of ERISA because Plaintiff does not allege that it sent a written request for the Patients' health benefit plans. Id. at 15-16.
Plaintiff agrees with Defendant that its ERISA claims as applied to A.G., C.F., and D.F. were improperly pled and should be dismissed. Pl. Br. at 11. Plaintiff contends that if ERISA applies, it will voluntarily dismiss Count One. Id. at 16 n.3. As a result, Plaintiff argues, the Court is divested of subject matter jurisdiction over the remaining state law claims and this matter must be remanded to state court. Id. at 11-13. Plaintiff notes, however, that "[e]ven if this court did decide Empire's Rule 12(b)(6) argument, the result should be the same: dismissal without prejudice" with the opportunity to re-plead. Id. at 15. Additionally, Plaintiff contends that the state law claims are not preempted by ERISA because they independently arise from "contracts (or quasi-contracts) with Empire, based on Empire's representations that Progressive Spine wasauthorized to perform the procedures in exchange for receiving reasonable payments." Id. at 16-19. Therefore, according to Plaintiff, those claims may properly be brought in state court.
As to B.G., Plaintiff voluntarily dismisses all counts with prejudice except for failure to provide documents under ERISA (Count Eight). Id. at 19. Plaintiff concedes, however, that Count Eight should be dismissed without prejudice with leave to amend. Id. Plaintiff maintains that the allegations concerning B.G. should be severed from those concerning the other patients in Count Eight, and the portion pertaining to B.G. should remain in federal court after any pleading deficiencies are cured. Id. at 19-21.
According to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court should dismiss a complaint when it fails "to state a claim upon which relief can be granted." In analyzing a motion to dismiss under Rule 12(b)(6) the court will "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir.2002). In addition to the complaint, the Court may also consider any exhibits attached thereto. See Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) ().
To survive dismissal, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Determining whether a complaint is plausible is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. While not a "probability requirement," plausibility means "more than a sheer possibility that a defendant has acted unlawfully." Id. at 678. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. A court, however, is "not compelled to accept unwarranted inferences, unsupported conclusions or legal conclusions disguised as factual allegations." Baraka v. McGreevey, 481 F.3d 187, 211 (3d Cir. 2007).
Under Federal Rule of Civil Procedure 12(b)(1), a complaint must be dismissed if the court lacks subject matter jurisdiction. In addition, "[a] motion to dismiss for want of standing is . . . properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter." Ballentine v. United States, 486 F.3d 806, 810 (3d Cir.2007). "A district court has to first determine, however, whether a Rule 12(b)(1) motion presents a 'facial' attack or a 'factual' attack on the claim at issue, because that distinction determines how the pleading must be reviewed." Constitution Party of Pa. v. Aichele, 757 F.3d 347, 357 (3d Cir. 2014).
A facial attack "concerns an alleged pleading deficiency whereas a factual attack concerns the actual failure of a plaintiff's claims to comport factually with the jurisdictional prerequisites." CNA v. United States, 535 F.3d 132, 139 (3d Cir. 2008) (internal quotation marks omitted). For a factual attack, "the allegations of the complaint have no presumptive truthfulness and the court must weigh...
To continue reading
Request your trial